Do I already have this coverage? Probably not…
Employment Practices Liability Insurance, commonly referred to as EPLI, is an additional insurance coverage business owners can purchase to protect themselves from lawsuits brought against them by a current, former or possibly even prospective employees. There are times when EPLI coverage can be extended to cover claims made by third parties such as customers and vendors.
EPLI coverage generally covers:
- Breach of employment contract
- Workplace Harassment
- Workplace Discrimination
- Wrongful termination
- Failure to employ or promote
- Emotional Distress
- Wrongful discipline
- Possibly Reputation Claims (Defamation)
- Mismanagement of employee benefit plans
The number of lawsuits filed by employees against their employers has been rising. According to the U.S. Equal Employment Opportunity Commission (EEOC) website, claims filed with the EEOC (the government agency that enforces federal employment discrimination laws) increased by 18 percent in just the past 10 years. The basis for the claims span a variety of issues, including discrimination based on race, gender, age and disability. Also click on the following EEOC link; to see the number of press releases in just the last 30 days that are related to EPLI coverage.
To prevent employee lawsuits, educate your managers and employees so that you minimize problems in the first place.
Here are a few examples to help manage the risk
- Have a detailed employee hand book that is regularly updated.
- Create effective hiring and screening programs to avoid discrimination in hiring.
- Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
- Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on what behaviors are not permissible.
- When terminating an employee, be sure reasons for termination are made clear and that COBRA benefits are discussed.
- Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.
The U. S. Equal Employment Opportunity Commission is a phenomenal website with free training resources, guides, compliance information and links to free training.
Even if you did everything right, implemented proper policies and procedures, an employment related lawsuit could still happen. EPLI lawsuits can be costly and proceedings can be lengthy. Litigation costs alone can cause a major financial strain on small to large companies and in many cases could ultimately force businesses to close their doors. By obtaining a well prepared EPLI policy, your business will be able to sustain these types of claims.
Your company is at risk and your standard liability policy will not cover this! This article is a very basic overview of EPLI, so please contact us at Henry M Murray to evaluate your EPLI needs and concerns.
–Scott Wanner, Jr., CLCS, CMIP – Insurance Agent
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